By Fabio Alves July 20 (Bloomberg) -- Brazil’s real climbed to the highest in more than nine months as stronger-than-estimated corporate earnings, rising equities and higher metal prices bolstered the outlook for Latin America’s largest economy. The real advanced for a seventh straight day, gaining 1.4 percent to 1.8987 per U.S. dollar at 5:01 p.m. New York time, from 1.9261 on July 17. It earlier touched 1.8966 per dollar, the strongest since Oct. 1. Today’s rise extended the real’s gain this year to 22 percent, the best performance against the dollar among the 16 most-traded currencies tracked by Bloomberg. “The global economic outlook has improved, so demand for commodities will be stronger, which is helping the risky currencies today,” Brown Brothers Harriman & Co. strategist Win Thin said in a telephone interview from New York. “If this positive sentiment continues and we see more improved economic data, then the real may keep strengthening against the dollar.” The index of U.S. leading indicators rose in June for a third consecutive month, reinforcing signs the world’s biggest economy may be emerging from the worst recession in five decades. In Brazil, gross domestic product probably increased 2.2 percent in the second quarter compared with the previous quarter, Bank of America Corp. said in a report today. “May industrial production and especially retail sales came in stronger than expected, following incipient signs of improvement in labor and credit conditions, consumer and investor confidence, and inventory levels,” Bank of America said. Brazil Earnings Natura Cosmeticos SA’s profit rose a more-than-expected 19 percent in the second quarter as an increase in consumer demand bolstered sales for Brazil’s biggest cosmetics company. Tam SA, the country’s largest airline, may report “strong” earnings because of the strength of the real, Bank of America said. The Bovespa index jumped 2.1 percent today to a five-week high as analysts recommended adding to holdings of retailers, homebuilders and banks. Vale SA, the world’s biggest iron ore producer, contributed most to the gain as metals prices rose. Copper prices jumped to a nine-month high in New York trading, climbing as much as 2 percent. Silver rose 1.7 percent, while gold jumped 1.2 percent and sugar gained 2.5 percent. The nation’s central bank has lowered borrowing costs four times this year to a record low of 9.25 percent to shore up Latin America’s largest economy. Central Bank Survey Policy makers probably will lower their benchmark interest rate 0.5 percentage point to 8.75 percent at the next meeting July 21-22, according to the median forecast in a central bank survey of about 100 economists published today. They forecast the bank will then leave the benchmark rate unchanged this year before raising it to 9.38 percent by the end of 2010, the survey showed. The yield on Brazil’s benchmark zero-coupon bonds due January 2010 fell four basis points, or 0.04 percentage point, to 8.71 percent. In the overnight interest-rates futures market, the yield on contracts due January 2010, the most actively traded on the BM&F commodity and futures exchange, rose one basis point tot 8.64 percent, while the yield on contracts due January 2011 dropped one basis point to 9.66 percent. To contact the reporter on this story: Fabio Alves in New York at falves3@bloomberg.net

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